Ryan FowlerJust 38% of Millennial and Gen Z households are currently on track for an adequate retirement income, according to the latest Hargreaves Lansdown Savings and Resilience Barometer published in September 2025.
The figure compares with 45% of Generation X households and 50% of Baby Boomer households. Hargreaves Lansdown said the findings highlight a persistent pensions gap despite improvements in auto-enrolment participation and rising awareness of long-term savings.
The analysis is based on target replacement rates underpinned by a Living Wage Pension measure, rather than the Retirement Living Standards previously used in the Barometer.
A target replacement rate assesses whether savers are on course to secure a retirement income that meets a defined percentage of pre-retirement earnings.
When factoring in wider household savings and investments such as ISAs, the picture improves across all age groups.
Under this broader measure, 47% of Millennial and Gen Z households are on track, compared with 53% of Generation X and 58% of Baby Boomers. Hargreaves Lansdown said this demonstrates the value of additional savings in strengthening long-term financial resilience.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “The pensions gap continues to loom large, with only 38% of Millennial and Gen Z households currently on track for an adequate retirement income. Older generations don’t fair too much better, with only 45% of Generation X and half of Baby Boomer households able to say the same. There is still much to be done to improve our retirement resilience.
“Younger age groups will of course benefit from having been auto-enrolled into a workplace pension for the majority of their working lives. They will have the opportunity to boost their contributions over the years to get them closer to their goal. The same can’t be said for older age groups who were not auto-enrolled and may not have started their retirement saving until much later. They have less time to make up any gaps.
“However, when we widen our approach and look beyond pensions to other savings and investments then the picture does improve. When we take things like ISAs into account, we see long term resilience rise across all generations. We see 47% of Millennial and Gen Z households on track, while 53% of Gen Xers can say the same. For those closest to retirement, we see resilience surge to 58% of households being on track – though it’s fair to say there is still much to do.
“If you are worried about falling behind with your retirement planning, then you do have options. Make use of online tools such as pension calculators to get a sense of what you are on track for, and you can make a plan from there.
“Boosting your contribution every time you get a pay rise or new job is one way of getting more into your pension. You can also make sure you are making the most of your employer contribution. While many will contribute at auto-enrolment minimums, there are others who are willing to contribute more if you do. This is known as the employer match and can really give your retirement planning a significant hike if you have some extra cash that you can afford to put into your pension.
“It’s never too late to make a difference. A 50-year-old earning £35,000 per year and contributing at auto-enrolment minimums to a pot currently worth £80,000 would be on track for a pension pot of £195,000 at age 67. Bumping the employee contribution from 5% to 7% would see that rise to £211,000. If you were to boost your contribution to 6% and have your employer match it, then you could see your pension pot grow to £227,000.
“You can then make sure you are making the most of all your pensions. You may have lost track of a pension from an old role, and this could leave you thousands of pounds worse off in retirement. If you think you’ve lost a pension, then get in contact with the government’s Pension Tracing Service. If you give them the name of your employer or pension provider, they can give you contact details.
“Once you’ve got your pensions together, you may decide to consolidate them. This can save time, money and administration. It will also give you a better sense of what you really have so you can make better retirement decisions. However, before you do so make sure you aren’t incurring expensive exit fees or missing out on benefits such as guaranteed annuity rates. It’s also worth saying it rarely makes sense to transfer a final salary pension.”
